Tax-Free Savings for Precollege Education Expenses
With a Coverdell education savings account, you can take tax-free withdrawals for a primary or secondary student if you use them for qualified expenses.

My daughter is just starting the 10th grade, and I have a Coverdell education savings account for her. I understand that even though she’s still in high school, I can tap the account tax-free for certain expenses. Which ones qualify?
You can use the money in your Coverdell for a number of educational expenses for private or public school. Unlike 529 college-savings plans, Coverdell education savings accounts can be used tax-free for college costs as well as many expenses for primary and secondary education (kindergarten through high school).
Some of the expenses have to be required by the school to be eligible; others do not, says Rande Spiegelman, vice-president of financial planning at Charles Schwab. You can use the money for fees, books, supplies, equipment and academic tutoring, whether or not they are required by the primary or secondary school. Special-needs beneficiaries can also use the money for certain services. Computers, equipment and Internet access for educational purposes can qualify, too. You can also use the money for room and board, uniforms, transportation or other supplementary services (such as extended-day programs) but only if they are required or provided by the school. (See IRS Publication 970, Tax Benefits for Education, for more about eligible expenses.)
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
To qualify to make Coverdell ESA contributions in 2014, your modified adjusted gross income must be less than $110,000 if you’re single or $220,000 if married filing jointly. For more information about Coverdell ESAs, see Another Way to Save for Education. For a list of brokerages and fund companies that offer low-cost ESAs, see SavingforCollege.com.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.
-
Small Businesses Are Racing to Use AI
The Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
The Me-First Rule of Retirement Spending
Follow the 'Me-First" rule and you won't have to worry about running out of money when the stock market goes south.
-
Standard Deduction 2025 Quiz: How Much Do You Really Know?
Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
New Bill Would End Taxes on Social Security Benefits in 2026: What Retirees Should Know
Tax Law Congress could look to high earners to help offset lost revenue and possibly shore up the Social Security program.
-
New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Age 65-Plus
Tax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
Claiming the Standard Deduction? Here Are 10 Tax Breaks For Middle-Class Families in 2025
Tax Breaks Working middle-income Americans won’t need to itemize to claim these tax deductions and credits — if you qualify.
-
Over Age 65? New $6,000 'Senior Bonus' Deduction Is Available Even If You Itemize
Tax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
New Trump Tax Bill: Five Changes Homeowners Need to Know Now
Tax Changes Trump’s new tax legislation is reshaping how tax breaks for homeowners work.
-
How the 2025 Child Tax Credit Rules Impact Single Parents
Tax Credits New changes to family tax credits, like the Child Tax Credit, will impact the eligibility of some households.
-
How Your 2025 Wedding Could Save You Money on Taxes
Tax Breaks There are some wedding expenses that are tax-deductible, and you don’t want to miss out on savings.